As we’ve seen the market change from prices falling this time last year, to properties lingering on the market, and now back to selling at lower prices it brings opportunities and challenges to buyers and sellers. Having the right negotiating tactics can put thousands in your pocket, whether you’re the buyer or seller. Here are the strategies that I keep in mind when representing my clients.
Put your ego to the side. One of the biggest reasons I see real estate transactions fall through is that ego gets in the way. Real estate negotiations can get heated up and many times people take things personally; don’t get hung up on the little things and lose out on the bigger picture.
It’s not just the buyer or seller taking it personally, realtors can be taking it personally as well. It’s important to be courteous and friendly. If something is said that could offend you, let it slide like water off a ducks back. I find people like to discuss value and get into a pissing match, this is counterproductive. I’d rather my clients have a successful deal over win an argument with another realtor. There have been many times I’ve had to hold my tongue and feed the other persons ego to get what we wanted. At the end of the day, you have a successful transaction and that is what matters.
Reverse offer. In a falling market you can be having lots of showings but no offers. I find it helpful to call potential buyers agents and offer the property at a lower price to get an offer, with the sellers permission of course.
The haircut. There’s many terms for this tactic, and it’s not my favorite to do, but it works in a slower market. This is when you have a property tied up and something comes up on the inspection report with deficiencies, you can use these to lower the price or change the dates or terms. Don’t try doing this in an increasing market because you’ll end up with nothing.
Ask questions. Whether buying or selling you want to know as much information as possible to find out motivation to use in your negotiations. I do this by simply asking a lot of questions. “Where are your buyers looking?” “What is their price range?” “Do they have kids?” “Are they looking to get into this school catchment?” “When do they need to move by?”
Asking questions when representing a buyer is good to understand the sellers motivation to make sure you tailor your offer to their needs, so they are likely to go with you in a multiple offer scenario.
Take action. You snooze you lose. As a buyer, when you see a property you like, write an offer right away. Chances are when you like something other people feel the same way, even if a property has been on the market for a while. As a seller, have an action plan of when you will deal with offers and let the buyers know. When the offers come in, deal with them. The best offers are the first offers, strike while the iron is hot.
Put it in writing. When making an offer, put it in writing. When an offer is written there is no mix-up in terms and conditions, everything is laid out. An offer means more when it’s on paper. A counter offer means more when it’s on paper. With tools like Docusign we can have an offer written up and signed within 5 minutes, countered within a couple minutes, and accepted.
Keep the ball moving. Always keep the offer moving by taking steps to getting the deal closer. I’ve seen offers take weeks, especially with larger deals. Keeping communication going with the other party, and keeping negotiations open to find a common ground is extremely important.
Have options. Ideally when looking to buy a home you’ll have a couple choices. Remember there is always another deal. When offering on a place don’t feel like you have to have it. If you absolutely have to have it, then pay up before someone else does. With sellers, the way to have options is properly pricing your home. Even in a slow market you will still get multiple offers.
Whether buying or selling keep these tactics in mind for a successful real estate transaction and overall good experience. This fall there will be opportunities for both buyers and sellers. For sellers the supply is low and now is a great time to list, for buyers there will be more product coming onto the market from the busy summer we had, giving you selection.
Let me know if I can put my negotiating skills to use for you.
Mark Hammer PREC*
RE/MAX Crest Realty